Page 37 - Suncor AR English

OIL SANDS CONTINUED
impacts of a higher proportion of bitumen sales and

resulted in average price realizations for Oil Sands
Operations of $82.83/bbl in 2013, compared to $81.69/bbl

in 2012.

Suncor’s average price realization for Syncrude sales in
2013 was $99.82/bbl, compared to $92.69/bbl in 2012,

due to an increase in WTI and the impact of the weaker
Canadian dollar in 2013.

Royalties

Royalties were higher in 2013 relative to 2012, primarily
due to higher production and slightly higher benchmark

prices for WCS that influenced the company’s regulated
bitumen valuation methodology used to determine
Sales volumes of non-upgraded bitumen increased in 2013,
royalties. In December 2013, Suncor reached an agreement compared to 2012, mainly due to higher production at
with the Government of Alberta concerning several
Firebag and the increased takeaway capacity for
outstanding issues under the Royalty Amending non-upgraded bitumen.
Agreements (RAA) entered into in 2008. The impacts of

the final settlements were not material to the company’s Inventory
results.
The Inventory variance factor decreased operating earnings
primarily due to an increase in the company’s average
Expenses and Other Factors
inventory levels in 2013, as a result of new infrastructure
Operating expenses for 2013 were higher relative to 2012. added to the company’s storage and logistics network to
Factors contributing to the change in operating expenses
support the growth in production.
included:

• An increase in cash operating costs for Oil Sands Price Realizations
Operations. See the Cash Operating Costs
Reconciliation for further details.
Year ended December 31
Net of transportation costs, but
• Non-production costs were lower in 2013 compared to before royalties ($/bbl)
2013 2012 2011

2012, due primarily to lower share-based compensation Oil Sands
expense and lower costs related to remobilizing certain ........................................................................................................................
Sweet SCO and diesel 104.22 96.95 103.95
growth projects.
........................................................................................................................
Sour SCO and
• Operating expenses at Syncrude were higher for 2013 non-upgraded bitumen 72.67 72.93 80.17
than 2012, as a result of higher natural gas prices and ........................................................................................................................
Crude sales basket
higher maintenance expenditures.
(all products) 82.83 81.69 88.74
........................................................................................................................
Transportation expense increased in 2013 relative to 2012
primarily due to increased bitumen production and sales, Crude sales basket, relative
to WTI
(5.35) (18.09) (12.44)
including incremental costs associated with higher diluent
imports.
Oil Sands Ventures
........................................................................................................................
DD&A expense for 2013 was higher than 2012, due mainly Syncrude – Sweet SCO 99.82 92.69 101.80
........................................................................................................................
to a larger asset base as a result of assets commissioned in Syncrude, relative to WTI (1.10) (1.50) 7.71
2013, including Firebag Stage 4 well pads, the hot bitumen

infrastructure, the Upgrader 1 turnaround completed in the Sweet SCO and diesel price realizations for Oil Sands
second quarter of 2013, and other assets commissioned in
Operations increased to $104.22/bbl in 2013 from
the latter part of 2012, including Firebag Stage 4 facilities $96.95/bbl in 2012, primarily due to an increase in the WTI
and the Millennium Naptha Unit. The company also
benchmark and the impact of a weaker Canadian dollar.
derecognized certain assets relating to projects no longer Sour SCO and bitumen prices increased marginally as the
being considered for advancement.
weaker Canadian dollar more than offset the wider WCS
to WTI differential. These increases more than offset the

SUNCOR ENERGY INC. ANNUAL REPORT 2013 33